The purpose of this paper is to econometrically clarify the current demand for beef in Japan by classifying beef into four classes and to suggest implications for the impact of beef tariff reduction. In the analysis, an appropriate model is selected and the existence or non-existence of habit formation and its type are clarified. The main analysis results are as follows. First, rational habit formation exists in the demand for beef. Second, each class is a substitute for classes adjacent in quality and seldom a substitute for other classes. Third, if tariff is reduced, import quantity will increase in the short run. By contrast, domestic beef production will be affected in the long run and the sharpest decrease will be seen in daily beef production.